IMPACT OF ADVERTISEMENTS ON FIRM PERFORMANCE (A case study of oasis bakery Birnin- kebbi) Abstract The current dynamic business environment is constantly changing due to globalization, regulatory changes, growing competition, growing customer demands, new information technologies and mergers and acquisitions. This has resulted in markets that can be considered increasingly turbulent and volatile, which makes many companies look for competitive capabilities that allow them to exceed customer expectations and improve financial and market performance. Companies increasingly use advertisement to reduce costs, increase market share and sales, and build strong relationships with customers. The objective of the study was to determine the impact of advertisement on the firm performance of Oasis bakery. The applied research design was a descriptive cross-sectional design. The study population included the 8 departments in the firm and all participated in the study, so a census was conducted. The study used primary data collected through self-administered questionnaires. The data collected was analyzed using a statistics package for the social sciences and presented in tables and diagrams. The study found that advertising helps companies make customers know their products and services, but also provides a useful tool to promote the brand image of products and services offered in the target market. The study found that advertisement allows companies to create a good image and promote the repurchase of the product or service, creating a large market segment that leads to the development of a larger market, a higher level in the market. The industry and build relationships with potential customers and reduce consumer dissatisfaction. The study also found that advertisement helps companies raise awareness, appeal, create standards through competition, persuasion and minimize barriers between companies and customers, as well as employment opportunities. Advertisement influences the performance of the firm, as it allows them to improve the purchase of organizational products by consumers, increase the volume of sales, increase the profits of the organization and improve the organizational relationship with their customers. CHAPTER ONE INTRODUCTION 1.1 Background of study The dynamic challenges business environments face today is ever-growing competition. Product and brand extensions pose a challenge in terms of getting customer attention (Mahendru, 2014). Marketing metrics has become a serious event for marketers, who apply a variety of tools to daze the competition. Advertisement as a tool used by marketers is vital to selling their services and\/or products. Advertisement gets to consumers through their radios, magazines, newspapers, mailboxes, TV sets and many others. In the twenty-first century, the use of adverts is a measure of building long-term competitive advantage over other competitors. During the nineteenth century little attention was paid to advertisement by economists. Bagwell et al. (2017) opines that economists of nineteenth century were interested in examining mostly the theory of perfect competition, which failed to see any significance of advertisement in the global arena. Pigou (1924) (as cited by Mahendru, 2014) argued that there is no merit in advertisement as the market will take as much as any seller wants to sell at the market price under perfect competition. It was suggested that advertisement expenses has no returns to producers under perfect competition. This is due to the premise that, on one side the demand curve is always fixed and there cannot be direct alteration by product makers, while on the other hand, the suppliers can put to market and sell all that they can produce at the ruling market price and no one of them can supply more at that price. Marshall (1919) brings to bear, the economic analysis of advertisement. Chamberlin (1933) further builds on Marshall\u2019s work and added selling costs into theory of economics. Getting to the close of the twentieth century, advertisement was one of the strongest tools of marketing. The occurrence of across-the-boards advertisement is also attributable to IT advancement, growth of income, literacy as well as urbanization. Advertisement is regarded as being persuasive, informative and complementary with the advertised product (Bagwell et al., 2017). The American Marketing Association sees advertisement as any form of payment for products, services and non-personal ideas presentation by a recognized sponsor. Similarly, advertisement is any form of payment of non-personal announcement about an organization\u2019s service, products and ideas by a known sponsor. Burnett (2008) sees advertisement as a tool of non-personal communication aimed at disbursing selling connected information to a targeted audience, financed by firm to advertiser and the message is delivered through media communication in order to attain the set objectives by the firm. Till date studies on advertisement have centered on impact on sales and profit since the main aim of advertisement is to increase sales revenue. Leach and Reekie (2016) opines that marketing experts have advance that advertisement aid in increasing sales both short and long run. In the past marketing was aimed at customer perspectives which in turn concentrated on marketing-sales association. In recent times, however, the practitioners have started showing keen interest in the financial impact of marketing actions (e.g. Joshi & Hanssens, 2010). They argued that advertisement is directed at increasing the sales of business, which would further lead to an increase in profits. Which therefore means that profit increase may turn to increase the market price of firm\u2019s share, thus leading to increased shareholders\u2019 wealth. Barffour (2010) believes that marketers are now targeting to achieve better financial returns with the same amount of marketing actions as needed to achieve the said target. It is very uneasy to justify the relationship between marketing expenditure and firm value with reducing budgets, unless it is linked to the stock price (Mahendru, 2014). Effectiveness of advertisement has been on discussion for a long time now covering years in examining its significance in marketing. Even though others believe that advertisement expenditure is seen as being wasteful in its entirety, conversely, it is maintained that contribution of advertisement cannot be undermined to increasing the sales revenue and profits. Debates on sales response to advertisement has been massive in marketing and researchers are yet to establish consensus on sales-advertisement relationships (Vakratsas and Ambler, 1999). 1.2 Problem Statement Following Shah & Akbar (2008) advertisement is a form of non-personal communication directed at increasing the sales of businesses, which is believed to lead to an increase in profits. Increased profits may help increase the market price of the company\u2019s shares, eventually leading to increased shareholders\u2019 wealth (Esteve & Requena, 2006). Therefore, it is imperative for a marketer or firms to understand whether advertisement helps achieve these objectives or not and this may aid a firm to consider if it is worth taking more advertisement to increase expenditure. Empirical studies on whether or not advertisement expenditure is able to achieve these goals has been inconclusive. Example Joshi & Hanssens (2013), Agyapong et al. (2014) Banerjee et al. (2013) provide evidence of the impact of advertisement expenditure on performance revenue. On the other hand Doyle (2016), Andras & Srinivasan (2013), Sharma and Sharma (2009) find only a minor or no relationship between advertisement and performance. Today advertisements are going international at a much faster speed leading to a universal response to advertisement, the forms of advertisement are changing to include electronic advertisement and mobile advertisement to the overall advertisement portfolio of firms. This leads to changes in the costing patterns of advertisement. Besides, there is evidence of studies on relationship between advertisement, sales and profits, but majority of these studies focus on developed countries (Burnett, 2008). In recent years, the developing economies such as Nigeria is emerging in global fronts as business leaders in the ECOWAS region in growth rates, making them favorite end point for firms and marketers (Barffour, 2010). Barffour (2010) further added that studies about effectiveness of advertisement expenditure on performance is limited in developing and emerging economies, and this is a gap this research wants to fill. Hence, following the above there is a solid need to conduct research studies about effectiveness of advertisement expenditure to cover most recent past in developing country. The current study builds on the existing literature by studying the inter-linkage between advertisement, sales and profits in the emerging economy of Nigeria. Furthermore, the study focuses on the service industry because most studies have been conducted in manufacturing sector, whereas the service sector happens to be the most concentrated industry in terms of product portfolio. Considering these factors, the study seeks the relationship between advertisement expenses, sales and profits in Nigerian service industry with a specific reference to oasis bakery. 1.3 Objectives of study The main objective of the study is to determine the impact of advertisement on firms performance. The specific objectives for the study are: 1.4 Research Questions On accounts of the above objectives the following questions are posed in order to achieve the stated purpose. 1.5 significance of the study This study is conducted primarily to understand the usefulness of advertisement expenditure in terms of its ability to power a firm\u2019s performance. It is expected that the findings of the study will be of particular interest to the marketers and managers as well as consultants in arriving at decisions regarding the advertisement of a firm. The study aims to establish the advertisement effectiveness in relations to impact to profit, sales and firm value. If the findings of the study show that advertisement impacts on profits and sales, marketers will be tempted to stretch their advertisement budgets in order to build a competitive edge over the competitors. Besides, currently, the shareholders are observed to be closely tracking every development in the firm. The result that will come out of this study will make strategic inputs to the shareholders in their decision making. 1.6 Scope of the study This work will center on the impact of advertisement on firm performance with special focus on Oasis bakery in Birnin-Kebbi. It will consider how advertisement has impacted their profit, sales and firm value from 2013 to 2019